Bank Run Storm: Goldman Sachs's Trap

Chapter 359 Bank Run Storm: Goldman Sachs's Trap

In Boston's sweltering summer, only the mornings are truly pleasant. Especially on cloudy days, the sun's heat is contained, and a cool breeze blows in from the Atlantic, carrying a delightful chill.

Normally, Bostonians would enjoy the cool morning in this kind of weather. But at this moment, a long line had already formed outside the Boston Savings Bank, with many depositors looking anxious, whispering to each other, and occasionally looking up to see when the bank would officially open.

The duty manager sensed early on that something was off today, because the people queuing to wait for the bank to open were no longer the artisans and shop assistants waiting to withdraw their salaries, but rather the usually most confident small business owners and senior scholars.

Unlike ordinary people, they don't readily express their desires and prefer to whisper among themselves in code, but this gloomy atmosphere is even more terrifying.

The atmosphere in front of the bank lobby was suffocating.

At 8:00 AM sharp, the bank opened.

Someone suddenly broke out of the queue, squeezed through the newly opened iron gate, and rushed to the counter, holding up their deposit slips and shouting, "I want to withdraw money! All of it! Now!"

In an instant, even the most respectable people lost their composure, the previous order completely collapsed, and people pushed and shouted, forming a frenzied torrent that began to surge into the bank lobby like a tidal wave.

The heavy oak teller counters of the bank creaked and groaned from the surging tide.

"I want to withdraw money! All the money—why? No reason, it's my money! I want it all!"

A well-dressed middle-aged gentleman was slamming his deposit slip onto the counter, his knuckles turning white from the force.

He was no longer the gentle Bostonian, but a trapped beast driven by fear.

"Sir, please line up, we are processing your request—" The young cashier's voice trembled, and her forehead was covered in sweat.

He mechanically checked the deposit slip in front of him, frantically taking out stacks of silver dollars from the vault behind him.

"Queue up? Your bank is going bankrupt, and you want me to queue up?"

A burst of laughter and curses erupted from the crowd. But the prevailing emotion was still anxiety.

Gradually, the staff at Boston Savings Bank learned the whole story from these depositors who were rushing to withdraw their money.

A rumor spread rapidly through the crowd that Boston Savings Bank had suffered huge losses due to its acquisition of a large number of judicial gambling tickets.

The duty manager immediately used a megaphone to urgently refute the rumor in front of the line, and the bank tellers also repeatedly emphasized that it was not true.

But rumors are like wildfire; once they start, they can never be extinguished.

"Have you heard? Bank President Xi Yi is involved in that damn judicial gambling case! He's taken all the bank's money to fill that bottomless pit!" A shrill female voice rang out from the crowd.

"Liar! Give us back our hard-earned money!"

"I want gold coins! Not paper money!"

The bank's duty manager immediately called headquarters to report the matter, but when he returned to the bank lobby, he saw that outside the bustling lobby, even more depositors who had heard the news were rushing to the bank.

The duty manager was speechless with fright. Beside him, a seasoned liquidator in his sixties, who had experienced the horrors of civil war, suddenly uttered a single word: "Bank run! Bank run!"

The duty manager was startled, but the word seemed like some kind of incantation to summon evil spirits, instantly igniting everyone's nerves.

People were no longer content with queuing; they began to push forward, and the counter groaned under the strain. The sound of shattering glass rang out shrilly, and some, unable to wait any longer, tried to climb over the railings.

"I need my money! I want my money. I don't care what bonds your damn CEO invested in, the money I have in your bank is my hard-earned money—give it back to me—"

A burly man gripped the iron railing with both hands and shook it vigorously, while the bank security guards quietly hid to the side, not daring to approach.

"Don't panic, this is a rumor—our bank has plenty of reserves, there won't be any problems."

The duty manager shouted, his voice hoarse. But no one paid any attention to his words.

In a corner of the lobby, a middle-aged man in a coarse cloth shirt coldly observed everything before him. He was one of Kennedy's men. Seeing this, he nodded slightly, pulled down his hat, and walked outside the bank lobby to find his two other accomplices.

"Tell your master the plan is going smoothly. He can now arrange for the next group to collect the money!"

One of his accomplices glanced at the crowd and a look of delight spread across his face. "Shall we get those community mutual aid group members here now?"

""

"No rush, they're keeping the panic going—but there's no need to maintain it now, the panic is just beginning!" the man concluded.

"Is this okay?"

"Of course, Boston Savings Bank is finished. Once the first domino falls, this edifice built on credit will crumble in an instant."

The man looked at the lobby of the Boston Savings Bank with a cold smile.

Meanwhile, inside the bank, the cash reserves in the vault were dwindling at a visible rate. The cashier supervisor, pale-faced, rushed into the inner room and ran towards the bank manager's office.

He knew that the bank's current cash reserves wouldn't last even an hour.

This morning, Mr. Sheey's face was also gloomy. At seven o'clock in the morning, he received a formal reply telegram from the party whip: the Democratic leaders did not think there was anything wrong with what Senator Kennedy was doing.

In addition, they asked Mr. Shie to focus on party unity, and that all the party’s attention should be focused on the important matter of Mr. Cleveland’s presidential campaign, and that other trivial matters were not worth worrying about.

The whip even subtly expressed his opinion that Shii should learn from Senator Kennedy's exemplary role in this Democratic election campaign.

True Democrats should stop fighting amongst themselves and unite against external threats!

After receiving the long telegram, Shirley felt as if she had swallowed fly droppings. She even skipped breakfast and locked herself in her study, sulking.

Of course, when he received the shocking news that his bank was experiencing a run, he didn't even want to eat lunch.

Shii stood in his office, decorated with dark wainscoting, pacing back and forth in the cramped space like a trapped lion.

He is fifty-five years old and was once one of Boston's most respected bankers; his name represents stability and integrity.

However, now, his back view looks hunched and old, and his meticulously combed gray hair now appears somewhat disheveled.

"The vault is running low, and the crowd is out of control. Please take swift and decisive action!"

This is a request that just came from the bank.

"Damn it! It must be Kennedy, that despicable hyena, that coyote! How dare he spread rumors and cause a run on us!"

Xi Yi gritted her teeth in anger.

But to be honest, he wasn't afraid of these underhanded tactics. After all, Boston Savings Bank was an old moneyhouse in New England and an important part of the Boston financial group. If it were just a bank run, it wouldn't have worried him.

Xi Yi immediately ordered a tightening of credit, halting all loan repayments and collecting cash from partners, determined to use absolute power to suppress the current panic.

Shii thought it was just a minor incident and didn't even bother to explain the absurdity of the rumors. But by noon, the situation had deteriorated further.

Besides banks in Boston, other banks in New England also began experiencing bank runs. At the same time, some large clients suddenly stopped transferring funds, and agreed-upon projects were met with a cold shoulder from their clients.

Xi Yi suddenly felt inexplicably nervous.

This is a clumsy lie that anyone in the industry should be able to see at a glance; the so-called judicial betting is completely fabricated.

Their own banks would not consider such bonds as investment assets.

But in this age that values ​​reputation, explanations seem so pale and powerless. Rumors overwhelmed him like a tidal wave; people didn't care about the truth, they only believed what they wanted to believe: a banker who had participated in a gamble that desecrated the law.

And they lost everything.

The depositors were terrified. They were afraid that the bank manager would use their savings to cover up some gambling debts. Their only reaction was to withdraw the money and hold it in their hands to feel at ease.

The next day, the situation was even worse. Shii paced back and forth, deep in thought. After a while, he stopped, walked to the window, and pulled back a corner of the heavy curtains.

He could see the long line outside the bank, stretching all the way to the street corner, and the faint sounds of the crowd's clamor drifted over, like a flock of hungry crows circling.

"Absurd! Utterly absurd!" he growled at the empty office.

He loosened his tie, feeling like he was about to suffocate.

Shii needs money, a lot of money, to deal with this bank run and to stabilize depositors' confidence. If he can just get through these few days and the storm passes, he can clear things up.

"Just $400 million," Shii muttered to himself, "Just $400 million to calm this damn storm."

He picked up the phone on the table and dialed the number for First National Bank of Boston.

A familiar yet indifferent voice came from the other end of the phone.

"Old man, it's not that I don't want to help you," Charles Ward, president of First National Bank of Boston, sighed on the other end of the phone, "You know, money is tightening all over New England right now. My reserves are also running low."

Sheeyi suppressed her anger and tried to make her tone sound calm. "Charles, we've known each other for twenty years. I guarantee with my reputation that this is just a temporary liquidity crisis. I only need 400 million, to tide me over for a month, with interest at market rate plus two percentage points."

There was a moment of silence on the other end of the phone, followed only by the hissing of electricity.

"Dude," Ward's voice was low, tinged with barely perceptible schadenfreude, "let me tell you the truth. The board met last night specifically to discuss you. That 'legal bet' rumor—it's having a terrible impact. At this critical juncture, if we lend you money, our shareholders will kill me. Sorry, there's really nothing we can do."

"Hey! That's a rumor, can't you understand?" Xi Yi shouted angrily.

With a "ding," the phone was disconnected.

Hearing the busy tone from the receiver, Xi felt a surge of heat rush to his head. He slammed the receiver on the table, his chest heaving violently.

"Bastard!" he roared.

But this is just the beginning.

He then dialed the number for Boston Bankers Trust.

"Mr. Shii, I'm very sorry, we just made a large loan last week and we're really short on cash right now."

Then there's the Bank of Massachusetts.

"Mr. Shii, you'd better take care of your personal issues first. We don't dare take the risk until you've cleared your name."

.

One, two, three —

He made calls to every reputable financial institution in Boston.

He was once a guest of honor, a leading figure in Boston's financial circles. Now, he was an abandoned leper.

Every bank manager who answered the phone either gave evasive answers or simply refused. They were all waiting for Boston Savings Bank to collapse so they could grab its market share.

That's how banks are. They may hold enormous wealth, but when faced with a bank run, cash is king. Without cash, it's like a lion exposing its vulnerable belly, and the more difficult it is to satisfy depositors' withdrawal demands, the faster the reserves are depleted.

Shii slumped into the large leather chair, feeling as if all his strength had been drained away. Outside the window, darkness fell, and the lights of Boston began to twinkle, but his world was plunged into endless darkness.

"Nobody—nobody will help me—" he muttered to himself, his eyes vacant.

Just then, a telephone on the table suddenly rang. The ringing sounded particularly jarring in the quiet room.

Shii was startled; he stared at the black phone as if it were a venomous snake.

Xi Yi suspected this was another call to collect payment. He hesitated for a long time before his hand trembled as he reached out and picked up the receiver.

"Feed?"

A young, calm, and even slightly respectful voice came from the other end of the phone.

"Mr. Shie? I'm Henry Goldman from Goldman Sachs. We just met a couple of days ago—"

Shee paused for a moment, then remembered the Wall Street discount bill broker who had called that Saturday to visit her.

On Monday, Shirley had met him again in this office. His assessment of Henry Goldman was: the man was shrewd enough, but utterly foolish, actually recommending him some kind of interbank lending scheme involving pledged bills—

Wait a minute—a loan? A short-term loan? Cash?!

Xi Yi's heart jumped into his throat. He suddenly understood what the other party meant by calling.

"What can I do for you?"

A smile came from the other end of the phone. He said, "Actually, it wasn't me, but our company's president, Samuel Sachs. He asked me to pass on a message to you."

"What did you say?" Xi Yi felt a vague unease.

The other person laughed and said, "He said, if all the wells in Boston have dried up, why not try drinking the water in New York?"

""

Goman's words jolted Shii awake. There was no doubt that they were there to take advantage of the situation. They must have heard about the bank run.

But—isn't this also a path to liberation?

"Are you in Boston?" Shii asked, raising her voice.

"Actually, I am! However, I'm about to return to New York—besides, if you really need cash, I don't have any here—if you would do me the honor of coming to New York with me?"

Gao Man's voice was very sincere, as if he were asking the other party for a favor.

Xi Yi froze, his hand holding the phone stiffening as if it were made of marble. After a few seconds of thought, he nodded sharply—

Even though the other party can't see it at all.

"Sure! Are you at the train station now? Then wait for me. My carriage will be there in twenty minutes," Shii replied.

Henry Goldman hung up the phone and turned to look at Larry, who was sitting behind his desk.

"He's going to come back to New York with me, Larry. He sounds like he's about to break down."

Larry was leaning back in his chair, a large cigar between his fingers. He wore a shrewd smile, and his eyes, shrouded in smoke, seemed unfathomable.

"Very good," Larry said with a smile, exhaling a smoke ring. "Congratulations. Goldman Sachs is about to make a fortune. Send him to New York; this is your home turf, and you can do whatever you want with him."

Goldman nodded and said with a smile, "—They hold a lot of preferred stock and fixed-rate bonds of the New York, New Haven, and Hartford Union Railroads. Using that as collateral is foolproof."

"Yes!" Larry nodded with a smile, pointing to the small square of the train station illuminated by gaslights outside. "Don't rush, Henry. You can see his carriage from here. Sit here and have some milk tea! You can go out after you see him."

The two chatted for a while, and as Shire's carriage appeared in the small square of the train station, Goldman couldn't help but ask, "Larry—how did you know last Friday afternoon that his bank was going to face a run? And why did you send me to Boston?"

Larry seemed not to hear him, and just looked at the small square and said with a smile, "Sheey's carriage is here! Henry, you'd better hurry up and remember to get a good price."

Larry didn't answer, but Goldman understood that was the best answer.

Goldman quickly straightened his clothes and put on his top hat. Before leaving, he suddenly bowed slightly to Larry, saying, "Thank you so much! Goldman Sachs will definitely handle this well!"

Larry, with a nonchalant smile, walked over and patted Goman on the shoulder. "Look at you! We're brothers, no need for thanks."

When Larry placed his hand on Goldman's shoulder, Goldman involuntarily flinched.

He gave a respectful smile, then said goodbye to Larry and slowly left the convenience store office.

After leaving the house, Goman strode towards Shii, who was anxiously waiting.

>